May
22
2014

Q1 Real Estate Industry Special Report Chronicles Mixed Housing Recovery

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Today Experian Business Information Services released a special report on the Real Estate industry revealing Q1 2014 as a mixed bag; depending on what part of the country you are doing business. During the first three months of the year, activity was down overall due to a combination of rising mortgage rates and particularly bad weather in most parts of the country. However, there were pockets of resilience, particularly on the West Coast, where demand exerted the kind of upward pressure on prices we’ve not seen since the mid-2000′s.

From a national perspective, sales of new and existing homes declined significantly, much of which can be attributed to the harsh weather, east of the Mississippi, that kept prospective buyer foot traffic to a minimum. This claim is supported by the sharp bounce back in pending home sales in March as the weather normalized in the Midwest and Northeast.

Key Credit Performance Highlights

Rochester, NY, Pittsburgh, PA and Portland, OR had top credit risk scores, while Miami, FL, Memphis, TN and Atlanta, GA remain at the bottom. The South has stalled economically in all sectors, directly — or indirectly — impacting the real-estate industry. Warehouses are going empty. Strip malls can’t find tenants. Apartment buildings can’t fill vacancies. No one is building new homes, and we don’t expect the situation here to improve any time soon.

Albany- Schenectady, NY, Stamford, CT and Honolulu, HI maintain the lowest bankruptcy rates while Las Vegas, NV, Sacramento, CA and Ventura, CA remain at the bottom. The Golden State is performing poorly in bankruptcy rates despite its dramatic upturn in the real-estate market, an indication that lenders are showing little patience for nonperformers.

Grand Rapids, MI, Salt Lake City, UT and Omaha, NE maintained low delinquency rates, while Nashville, TN, Fort Myers, FL and Memphis, TN remain in the bottom three.

We see strong performances among cities in the stable Great Lakes/Northeast regions with Grand Rapids, MI and Rochester, NY in the top two metros. The South and Las Vegas continue to dominate the lower end of the spectrum with Las Vegas, NV, Atlanta, GA and Fort Myers in the bottom three and Detroit, MI still in poor shape economically, joining this list of “usual suspects.”

Looking Ahead

Nearly all of the recent data confirms our belief that economic activity is poised to spring forward as temperatures warm. For example, U.S. businesses added 288,000 positions in April, the most since January 2012. According to Moody’s Analytics, monthly job growth is expected to remain north of 200,000, on average, for the rest of 2014, which will keep the consumer recovery humming. Pent-up demand for housing also will be released as younger workers (finally) get jobs and move into their own homes or apartments after either living with roommates or relatives for the past few years. We look for home prices to continue to rise and inventories to fall.

You can read the complete report by clicking the button below.

Download the full report
 

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